Shares of Rolls jumped the most in nine months after the
U.K. company said underlying pretax profit rose to 637 million
pounds ($987 million) from 595 million pounds a year earlier,
higher than the 617 million-pound average estimate of analysts.

Plane makers are lifting output after building up record
backlogs, with Airbus and Boeing together targeting more than
1,100 deliveries this year. That helped swell first-half revenue
at London-based Rolls-Royce 6.6 percent to 5.72 billion pounds
and boosted the order book 4 percent to 60.1 billion pounds.

“We view these as positive results in the key aerospace
area, which for us remains the major driver of the stock,” said
Robert Stallard, an analyst at RBC Capital Markets in London
said. “Where performance in the first half fell short was in the
marine and energy divisions.”

Rolls-Royce shares closed 6.7 percent higher at 885 pence,
their biggest gain since Oct. 13, taking gains this year to 20
percent and valuing the company at 16.6 billion pounds.

Cash Focus

Chief Executive Officer John Rishton confirmed in a
conference call the company’s full-year guidance of “good
growth in underlying profit with cash flow around break-even.”

That excludes gains from the purchase of shares of German
engine company Tognum AG in a venture with Daimler AG and the
sale of Rolls’s stake in International Aero Engines. The Tognum
acquisition should be completed in the first six months of 2013.

Given global economic conditions, Rolls is content to hold
on to cash and there are no immediate plans for further
purchases, though the company will “look at opportunities as
they come along,” Rishton said.

Rolls-Royce is “certainly not immune” from the global
slump, the CEO said, with sales down 9 in the marine business,
which accounts for about one-fifth of revenue. Sales at the
energy and power-turbine market were down 18 percent.

Rolls completed the disposal of its 32.5 percent stake in
IAE, a partnership with UTC’s Pratt & Whitney unit, on June 29.
That should result in 70 million-pound gain against full-year
underlying profit, it said.

Regulatory Approval

The U.K. company remains a major parts supplier for IAE’s
V2500 model, one of two engines offered for Airbus’s single-aisle A320 airliners. IAE’s remaining partners include Munich-based MTU Aero Engines Holding AG and Japanese Aero Engine Corp.

Rolls-Royce and Pratt plan to set up a new joint venture to
power future Airbus and Boeing mid-sized passenger jets that may
be fielded after 2020. Rishton said he’s hopeful that regulatory
approval for the plan will be gained soon.

This month’s grounding of Boeing 787 Dreamliners operated
by All Nippon Airways Co. following a component flaw in Rolls-Royce Trent 1000 engines won’t have any significant financial
consequences, the CEO said. Four of the five idled airliners are
flying again.

Rishton also said development of the Trent XWB engine for
the Airbus A350 long-range airliner, is progressing well.